WaFd (NASDAQ:WAFD) versus Columbia Banking System (NASDAQ:COLB) Financial Analysis

WaFd (NASDAQ:WAFD) and Columbia Banking System (NASDAQ:COLB) are both mid-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, risk, valuation, analyst recommendations, institutional ownership and dividends.

Institutional and Insider Ownership

83.7% of WaFd shares are owned by institutional investors. Comparatively, 92.5% of Columbia Banking System shares are owned by institutional investors. 1.5% of WaFd shares are owned by insiders. Comparatively, 0.6% of Columbia Banking System shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations for WaFd and Columbia Banking System, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WaFd	0	4	1	1	2.50
Columbia Banking System	0	9	4	1	2.43

WaFd presently has a consensus price target of $34.80, suggesting a potential downside of 4.61%. Columbia Banking System has a consensus price target of $32.13, suggesting a potential upside of 5.16%. Given Columbia Banking System’s higher possible upside, analysts clearly believe Columbia Banking System is more favorable than WaFd.

Dividends

WaFd pays an annual dividend of $1.08 per share and has a dividend yield of 3.0%. Columbia Banking System pays an annual dividend of $1.48 per share and has a dividend yield of 4.8%. WaFd pays out 35.3% of its earnings in the form of a dividend. Columbia Banking System pays out 59.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. WaFd has raised its dividend for 2 consecutive years and Columbia Banking System has raised its dividend for 4 consecutive years. Columbia Banking System is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares WaFd and Columbia Banking System’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WaFd	18.25%	8.94%	0.90%
Columbia Banking System	19.28%	11.41%	1.30%

Valuation & Earnings

This table compares WaFd and Columbia Banking System”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WaFd	$1.41 billion	1.91	$226.07 million	$3.06	11.92
Columbia Banking System	$3.21 billion	2.75	$550.00 million	$2.51	12.17

Columbia Banking System has higher revenue and earnings than WaFd. WaFd is trading at a lower price-to-earnings ratio than Columbia Banking System, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

WaFd has a beta of 0.84, meaning that its stock price is 16% less volatile than the S&P 500. Comparatively, Columbia Banking System has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500.

Summary

Columbia Banking System beats WaFd on 12 of the 17 factors compared between the two stocks.

About WaFd

WaFd, Inc operates as the bank holding company for Washington Federal Bank that provides lending, depository, insurance, and other banking services in the United States. The company offers deposit products, including business and personal checking accounts, and term certificates of deposit, as well as money market accounts and passbook savings accounts. It also provides single-family dwellings, construction, land acquisition and development, consumer lot, multi-family residential, commercial real estate, home equity, business, and consumer loans, as well as commercial and industrial loans. In addition, the company offers insurance brokerage services, such as individual and business insurance policies; holds and markets real estate properties; and debit and credit cards, as well as acts as the trustee. It serves consumers, mid-sized and large businesses, and owners and developers of commercial real estate. The company was formerly known as Washington Federal, Inc. and changed its name to WaFd, Inc in September 2023. WaFd, Inc was founded in 1917 and is headquartered in Seattle, Washington.

About Columbia Banking System

Columbia Banking System, Inc. operates as the holding company of Umpqua Bank that provides banking, private banking, mortgage, and other financial services in the United States. The company offers deposit products, including business, non-interest bearing checking, interest-bearing checking and savings, money market, and certificate of deposit accounts; and insured cash sweep and other investment sweep solutions. It also provides commercial lending products, such as commercial lines of credit and term loans, accounts receivable and inventory financing, international trade finance, commercial property loans, multifamily loans, equipment loans, commercial equipment leases, real estate construction loans and permanent financing, and small business administration program financing, as well as capital markets. In addition, the company offers wealth management comprising financial planning, investment, trust, and insurance; treasury management, which includes digital and mobile banking solutions, ACH, wires, positive pay, remote deposit capture, integrated payments, integrated receivables, lockbox, cash vault, real-time payments, commercial card, and foreign exchange and international banking related products, as well as merchant services; and brokerage services, residential real estate loans and consumer loans. It serves its products to corporate, institutional, small business, and individual customers. The company was founded in 1953 and is headquartered in Tacoma, Washington.